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Applications for US unemployment benefits fell to 312k last week; near pre-recession levels

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The Canadian Press | Story:
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Jun 19, 2014 / 10:26 am

Photo: The Canadian Press. All rights reserved.

In this Wednesday, June 18, 2014 photo, job seekers attend a job fair held by Sheetz to staff their under-construction distribution center, in Burlington, N.C. The Labor Department reports the number of people who applied for unemployment benefits last week on Thursday, June 19, 2014. (AP Photo/The Times-News, Sam Roberts)

WASHINGTON - Fewer Americans sought unemployment benefits last week, as the number of people collecting jobless aid fell to its lowest level in more than six years.

The Labor Department said Thursday that weekly applications for unemployment benefits fell 6,000 to a seasonally adjusted 312,000. The four-week average, a less volatile measure, declined to 311,750.

There are 2.56 million people receiving benefits. That's the lowest total since October 2007, about two months before the recession began.

Jennifer Lee, a senior economist at BMO Capital Markets, said the report in a "blinding glimpse of the obvious "_is clearly "good news."

Applications are a proxy for layoffs, so the relatively low number of people seeking benefits shows that employers are letting go of fewer workers. When businesses are confident enough to keep staff, they may also hire more workers. Job gains should feed stronger economic growth.

Earlier this month, the Labor Department said employers added a solid 217,000 jobs in May.

Monthly job gains have averaged 234,000 for the past three months, up sharply from 150,000 in the previous three. The unemployment rate, which is derived from a separate survey, remained at 6.3 per cent in May. That's the lowest rate in more than five years.

The data in Thursday's unemployment benefits report overlaps with the survey for the June jobs report. The low level of applications would suggest similarly strong hiring this month, Lee said.

The steady gains after the economy shrank during the first three months of the year because of the winter weatherâ€” point to faster growth ahead.

Gross domestic product fell 1 per cent in the first three months of 2013. Many economists expect that number could be further revised downward, while growth returns as warmer weather has generated more hiring and consumer spending.

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